GLOSSARY & FAQ

GLOSSARY & FAQ

A

Act of God

Refers to a natural event that cannot be foreseen or predicted, would not apply to riots or acts of war.

All Risks

Wider cover than given under a normal property insurance policy, normally covers personal items away from the property. Covers any loss or damage apart from exclusions stated in the policy.

Accidental Damage

Cover for items that are damaged purely by accident for example by children running around or if you are dusting a favourite vase and it falls off the shelf, can apply to both contents and buildings.

Additional Premium

A further premium payable by the insured as a result of policy endorsement that may have increased the risk or amended the policy conditions or sum insured.

Annual Premium

Monies payable to the insurer / insurance borker due on the inception or renewal of an annual policy

Authorised Advisor

An Authorised Advisor (AA) is a term that describes an investment business firm (Broker) that can provide investment advice on investment instruments (insurance products) without the necessity to hold a letter of appointment (the entire relevant market). In addition it can receive and transmit orders to product producers from whom it holds a letter of appointment. An AA is obliged to recommend the most suitable investment product available in the market, regardless of whether or not it holds an appointment from the relevant product producer.

Average Clause

A policy condition that requires the amount of a claim payment to be reduced proportionately if the policyholder has not insured his property for the full amount of its value or replacement cost.

B

Betterment

The principle by which a claimant has to make a payment towards the cost of the claim because his or her property will be in better condition after repair than before the loss or damage occurred.

Breakdown Assistance

Traditionally provided by companies such as the RAC and the AA, more recently Insurance companies include this type of cover as a complementary cover to their motor insurance.

Buildings Insurance

A policy covering the structure of a house or other building against a number of different risks or perils.

Business Equipment

Insurers now offer limited cover under standard home insurance polices in respect of equipment used at home in connection with the owners business i.e. faxes, computers etc… Computers not used for business purposes, i.e. family computer used for games etc.. are covered as standard.

Business Interruption

Insurance covering the loss of profits of a business and certain other costs resulting from fire or other insured events..

C

Cancellation Clause

A clause in an insurance contract which permits an insurer and/or the person insured to cancel the contract before it is due to expire. The clause may allow for the refund of part of the premium in respect of the unused portion of the policy.

Certificate

Document issued by insurers as evidence that insurance is in place to meet the requirements of the law (notably for motor and employers liability insurance)

Claim

The term is used when payment or settlement is sought under the terms of an insurance policy.

Claimant

The person making a claim.

Combined Policy

A policy which combines covers that were traditionally sold separately, for example a combined commercial policy now covers Fire & Perils, Loss of Profits, Employers & Public Liability, Glass Breakage in one policy whereas historically they would have been sold separately.

Commercial Insurance

Any policy taken out by a company, partnership or organisation to cover their trade, business or profession.

Commission

Money paid out to an Insurance Intermediary by an Insurance Company for business written

Comprehensive Cover

A policy covering a number of types of loss or damage, used mainly in Motor insurance where it means that in addition to Third Party cover, the policy provides cover in the event the insured vehicle is destroyed or damaged by accidental means.

Condition

Part of a policy stating that certain rules must be followed, for example, the duty to take reasonable care to protect property, or to report claims to the insurance company promptly.

Contents Policy

A policy covering the contents of a home or other building against a number of different risks.

Contribution

The principle of contribution applies where a risk is insured on more than one insurance policy (e.g. by a travel and household all risk policy), and the insurers concerned may share the ccost of any claim.

D

Duty of Disclosure

Your duty when seeking insurance to inform the insurer of every material fact. The duty arises when getting quotes for new insurance. It also applies if you look for a variation of cover and at renewal of your policy. Non disclosure of a material fact can invalidate a policy: an insurer can cancel a policy or refuse to pay a claim if you fail to reveal all material facts when applying or renewing insurance.

Direct

Insurance sold without the intervention of an intermediary. Included in this category are sales via newspaper advertisements, telephone sales and business through branch offices.

E

Employers Liability Insurance

Insurance that all employers must have to cover them against claims by employees who are injured at work.

Endorsement

A written change to an insurance policy that becomes part of it, normally issued as a document to be appended to your policy.

Ex-Gratia Payment

Any payment made by an insurance company that is not strictly necessary under the terms of the policy.

Excess

An amount of money that the policy holder pays towards the cost of a claim, normally the first €100 to €300.

Exclusion

Risks that are not covered by your insurance policy.

F

Financial Regulator, The

The regulator for Financial and Insurance Services in Ireland

Financial Ombudsman, The

A statutory officer who deals independently with unresolved complaints from consumers about their individual dealings with all financial service providers. It is a free service to the complainant.

G

General Insurance

Insurance of non-life risks where the policy offers cover for a limited period, normally one year.

Government Levy

An Irish Government tax levied on most non life insurance premiums, currently 2%.

Green Card

Issued to motor policyholders travelling abroad as evidence that they have the minimum insurance required by law in the country in which they are travelling. Not strictly required for European travel now because minimum legal cover is included in Irish policies

H

Holiday Insurance

Also known as Travel Insurance, this policy covers certain risks connected with holidays, usually includes cover for costs asscoiated with unavoidable cancellation , personal accident, medical treatment abroad and lost or stolen luggage.

Household Insurance

Includes insurance of both buildings and contents, together with any ‘add-ons’ that are included with the policy such as public liability and all risks

I

Inception Date

The date that cover starts on an insurance policy.

Indemnity

The principle whereby a person who has suffered a loss is restored, as far as possible, to the same financial position that he/she was in immediately prior to the loss, subject to any contractual limitation as to the amount payable (the loss may be greater than the policy limit). The application of this principle is called indemnification.

Insurable Interest

Principle in Insurance that states you may only take out insurance if you would suffer financial loss if the event covered by the policy happens.

Insured

A person who is insured under a contract of insurance. Where there is one insured this person may also be referred to as the policyholder.

Intermediary

An intermediary is someone who advises potential clients about their insurance needs, helps them to select the most appropriate policy and provides an ongoing service in all subsequent matters relating to such policy.

K

Knock - For - Knock

An agreement between insurance companies whereby each insurer paid for damage to it’s policyholder’s car, regardless of which driver was to blame, to reduce legal and administration costs. No longer in operation.

L

Lapse

The non-renewal of a policy for any reason.

Legal Expenses

Insurance that covers the cost of private legal action, defined in the policy, sometimes available as an add on to home or motor policies.

Liability

Legal responsibility for causing loss to someone else by causing injury to them or damaging their property.

Loading

An extra charge to a standard premium reflecting the additional risk being taken on by the insurer. E.g. a motorist with a number of penalty points may find their motor premium is loaded.

Loss Adjuster

A professional who is appointed to investigate the circumstances of a claim under an insurance policy and to advise on the amount that is payable to the policyholder in order to settle that claim. Loss adjusters are generally appointed by insurance companies.

Loss Assessor

A person who negotiates claims on behalf of a policyholder with the insurance company.

Loss of Profits Insurance

Commercial policy that covers a business for the loss of profit resulting from an insured peril e.g. fire.

M

Market Value

Most policies provide settlement for a total loss claim (the car is stolen or irredeemably damaged) on a "market value" basis. This means you are entitled to an amount representing the cost of a vehicle of similar make, model, age and condition. Or, if the vehicle is less than one year old, many insurers will replace it with a new vehicle of the same make and model you lost.

An Agreed Market Value cover is especially useful for classic or vintage cars - where the insurer agrees to pay a specified amount in the event of a total loss.

Material Fact

This refers to any fact that would influence the decision of an insurer in deciding whether to accept an insurance risk and the terms including the premium level at which the company would be willing to grant cover.

Multi-Trip Insurance

Travel insurance that cover mutiple holiday or business trips abroad, normally for one year.

Multi-Agency Intermediary

A Multi-Agency Intermediary (MAI) is a term that describes an investment business firm that may receive and transmit orders in investment instruments and provide advice on investment instruments only on behalf of product producers from whom it holds an appointment in writing

N

Named Driver

A driver specified on an insurance policy who is not the policy holder.

New for Old

Cover for property where an insured item, lost or destroyed by an insured peril, is replaced as new with no deduction for wear and tear.

No Claims Discount/Bonus

This means you are rewarded on an ascending scale for each successive year without a claim and is most commonly associated with comprehensive motor insurance policies. If you do claim, your bonus is reduced, although if the accident is not your fault, insurers will leave your bonus intact. Some insurers allow you to "protect" your bonus by paying an extra premium, so you're not penalised for just one claim.

Non Disclosure

Whereyou, or anyone acting for you, fails to state a material fact when applying for, or renewing, an insurance policy.

O

Open Driving

Allows any driver, with the permission of the owner to drive the insured vehicle. Normally restriceted to Full Licence holders and persons between the ages of 25 / 30 and 70.

Operating Result

A non-life insurer's profit or loss after its investment income has been added to its underwriting result.

P

Pensions

For many people, the income they receive from the State of retirement will not be sufficient to support them. For this reason, many people chose to provide for their retirements by taking out pensions with a life assurance company. This is usually done by way of a contract where, in return for a lump sum or a series of regular payments to the life assurance company, they will receive a lump sum at retirement.

Personal Accident

A policy that pays specified amounts of money if the policyholder is injured or dies as a result of an accident . Payments made are dependent upon the type of injury and may be made weekly for a set period or in a lump sum.

Personal Injuries Assessment Board

This is a statutory body, which provides independent assessment of personal injury compensation for victims of workplace, motor and public liability accidents. This assessment is provided without the need for the majority of litigation costs, such as solicitors and experts fees. Under the PIAB Act 2003, all claims for personal injury (excluding medical negligence) must be submitted to PIAB.

Policyholder

Person or organisation to whom the the insurer issues the policy. Normally the person or organisation to whom the policy benefits are payable.

Pre-Accident Value

PAV is the value of, for example, a vehicle before any damage occurred. PAV has no bearing on the price paid for an item, but what it was worth at the time of loss.

Premium

The amount charged by an insurer in return for providing insurance cover.

Professional Indemnity

Provides protection to businesses against errors made in their professional capacity, e.g. lawyers who incorrectly advise clients

Proposal Form

This is a form which contains a number of questions that you are required to complete for an insurer when seeking insurance. This form is needed to assist the insurer to decide whether or not it is willing to provide insurance cover and, if so, the terms of such cover.

Proposer

Person or company intending to take out the insurance policy.

PRSAs

Personal Retirement Savings Accounts (PRSAs) were introduced as new easy access, low cost, flexible personal pensions, to encourage individuals who have not already done so to make a provision for retirement. PRSAs pension products were launched on the market in early 2003.

Public Liability

Insures you against liability arising out of accidental boily injury or damage to the property of a third party.

Q

Quote

A statement from an insurer of the premium he will require for a particular insurance.

R

Reinstatement

Where insured property is damaged, it is usual for settlement to be effected through the payment of a sum of money, but a policy may give either the insured or insurer the option to restore or rebuild instead.

Reinsurance

Insurance protection bought by an insurer to limit its own exposure. The availability of reinsurance protection allows an insurer to expand its own capacity to take on risk. Without a reisurance facility, each insurer would be able to accept less business.

Renewal Notice

Notice sent to the Policyholder quoting a premium to renew the insurance policy for a further period.

Risk Management

The identification, measurement and economic control of risks that threaten the assets and earnings of a person, business or other enterprise.

S

Salvage

Recovery of all or part of the value of an insured item on which a claim has been paid. The insurer will normally dispose of the item and apply the proceeds to reduce the cost of the claim.

Schedule

Part of the policy document that contains information particular to the risk insured, including terms and conditions.

Serious Illness Cover

Serious illness insurance policies are a more recent market innovation and have proven very popular. Under the policy, the policyholder will be paid an agreed sum if he/she contracts one of a number of specificed serious illness such as cancer, stroke or multiple sclerosis.

Settlement

When an insurer pays a claim.

Single Premium

A lump sum life investment or pension policy under which the policyholder makes a one-off payment to the life office. The life office uses it to provide life assurance protection, or invests it on the policyholder's behalf for repayment with any gains at the end of the policy term(or in the case of a pension, for purchase of retirement benefits when the you retire).

Single Trip

Travel insurance taken out for a specific trip and for a spcified period of time.

Subrogation

This means that the insurer, which has paid a claim under a policy, has a right to step into the shoes of the insured in order to exercise in his name all rights he might have with regard to the recovery of the loss which was the subject of the relevant claim paid under the policy up to the amount of that paid claim.

Sum Insured

The maximum amount that an insurer will pay under a contract of insurance. The expression is usually used in the context of property and life insurance where (subject to the premium cost) the insured determines the amount of cover to be purchased.

T

Technical Reserves

The amounts insurers hold against future payment of claims.There is government supervisory control of the proper estimation of outstanding claims and the nature and spread of assets which can be used to cover technical reserves.

Third Party

Someone other than the insured or his insurer who has suffered injury or loss.

U

Under-Insurance

Where the sum insured is lower than the true value of the property insured.

Underwrite

This is the process whereby an insurer assesses if insurance cover can be provided and what premium should be payable. It can also refer to the acceptance of the obligation to pay or indemnify the insured under a contract of insurance.

Uninsured Loss

A loss incurred by you as a result of an accident where your own policy does not provide any cover, an example may be for additional costs of hiring a car whilst your own is being repaired.

Uninsurable Risk

A risk where loss is either inevitable (e.g. a house already on fire) or gradual (e.g. rust and corrosion).

Utmost Good Faith

The foundation principal of insurance that requires proposers to give all relevant information to the insurer and requires both insured and insurer to deal openly and honestly with each other.

W

Warranty

A policy condition, that, if not met, invalidates the cover provided by the policy.

Wear and Tear

The amount deducted from a claims payment in recognition of the depreciation of the property insured through usage of it over time. Where cover is provided on a “new for old basis” i.e. where the insurer agrees to replace an old item with a similar new one, no such deduction is made.

Write Off

A damaged vehicle that is unrepairable or uneconomical to repair. Also known as Total Loss.